How Parental Socioeconomic Status Influences the Time and Price to Child’s First Homeownership

Intergenerational wealth transfers manifest themselves in the form of parental support during the process of a child’s first home purchase. The level of parental support varies according to the socioeconomic status of the parents. This study focuses on how parental socioeconomic status affects the time to purchase and price of a child’s first home. Our results show that, first, parental economic status, especially parental total wealth, reduces the time to purchase a child’s first home; second, parental total wealth matter when the child’s first home price is in the lower quantiles. However, in the higher quantiles, economic status such as parental total assets, current home value, and total debt, as well as social status such as parental education and occupation, also mattered. This suggests that the wealth gap between children’s generations due to differences in parental support may arise from the purchase price rather than the time it takes to purchase a first home. Policy efforts, such as stabilizing housing prices, are needed to mitigate this phenomenon.